# Shards (ERC-1155)

A shard is an [ERC-1155](https://eips.ethereum.org/EIPS/eip-1155) token that represents some prediction on an NFT's future valuation.

## Pricing

Each shard contains two pieces of financial metadata that are used to compute its price:

1. Predict price: a prediction of the shard's value by some date.
2. Expiration date: the date the prediction lasts until.

A shard is listed at its predict price until its expiration date.

When an expiration date is reached, a linear Dutch auction down to 0 or until a buyer is found is initiated. The length of the Dutch auction is determined by the seller when they list the NFT.

Since every shard must be listed at all times, shard traders must provide a predict price and expiration date when they purchase shards.

To prevent situations like the [monopoly problem](http://assets.press.princeton.edu/chapters/s11222.pdf) (i.e. valued too highly or too far into the future), the protocol imposes a fee based on the parameters. The larger the predict price, the larger the fee; the further away the expiration date, the larger the [fee](/mechanism/fees.md).


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